Morocco explores new markets to boost stagnant tourism

Asian tourists pose for a photo as they visit the Hassan Tower in Rabat. (AFP)
Updated 27 February 2017
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Morocco explores new markets to boost stagnant tourism

RABAT: Morocco’s key tourism sector barely grew last year amid security challenges, but operators are hoping Chinese and Russian visitors will boost their fortunes in the coming years.
While political turmoil and terrorist attacks have battered the sector in Egypt and Tunisia, Morocco registered 10 million visitors last year, according to the Moroccan Tourism Observatory (MTO).
That was a barely perceptible rise of 1.5 percent from 2015, it said.
But hoteliers in the narrow streets of the capital Rabat’s old city were cautiously positive.
“Last year was better than 2015. And the first two months of 2017 augured an even better year,” said Hanane, manager of a local guesthouse.
Tourists are easy to spot wandering through Rabat’s old city with its craft stalls, Andalusian-style houses and a 12th-century kasbah overlooking the Atlantic.
But while tourism revenues rose 3.4 percent to $6.3 billion (€5.9 billion) in 2016, visitor arrivals to Morocco have fallen far short of an ambitious official target of 20 million per year by 2020. A growing number of visits by Moroccans who live abroad — counted as tourists when they come home — accounted for much of the sector’s buoyancy. Foreign visitor arrivals last year were down by 0.9 percent.
Karim, owner of a travel agency in commercial capital Casablanca, said more work was needed to drum up new business. “The situation is pushing us to look for new markets outside Europe,” he said. “But overall, it can be said that there was a slight recovery in 2016.”
Authorities are hoping for an influx of Russian and Chinese tourists, who currently account for just 1 percent of total visitors.
That is far behind the French, who make up almost a third of arrivals — a figure that includes many of Moroccan origin.
“Europeans still top the list, but the number of Chinese visitors is growing,” Hanane said.
“Since visas for the Chinese were abolished in June, a door has been opened.”
Tourism remains a vital pillar of the Moroccan economy and the country’s second biggest employer, after agriculture. The sector accounts for 10 percent of national income and, along with exports and remittances from Moroccans overseas, it is one of the country’s main sources of foreign currency.
Marrakesh, with its UNESCO-listed old town and the coastal town of Agadir have long been key attractions. They remain popular — in contrast to Tunisia, Turkey and Egypt, where visitor numbers have plummeted following the Arab Spring uprisings and repeated terrorist attacks. Morocco has not experienced an attack since a 2011 bombing in Marrakesh’s famed Jamaa El Fna Square, which killed 17 people, mainly European tourists.
Today, security forces stand guard at Morocco’s main tourist sites. The government, a key security partner of European countries, regularly announces it has dismantled terrorist cells. But while the kingdom remains safer than other countries in the region, visitor numbers have stubbornly refused to rise.
The local press calls the sector’s performance “lackluster and disappointing” compared with a 2010 plan to double arrivals.
Back then, “Vision 2020” envisioned creating 200,000 new hotel beds and attracting 20 million visitors a year by the end of the decade.
Since then, “many international factors” had disrupted the government’s efforts, MTO chief Said Mouhid said.
“We will not reach 20 million in 2020, for sure, but it remains a symbolic figure to mobilize operators,” he said. He defended last year’s performance as “respectable and positive.”
“We are in a difficult international context, marked by many obstacles to travel,” he said. “These figures prove the resilience of Moroccan tourism, even if they remain below our ambitions.”


Another surprise fall in UK inflation muddies Bank of England rates message

Updated 3 min 34 sec ago
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Another surprise fall in UK inflation muddies Bank of England rates message

LONDON: British inflation fell unexpectedly in April, according to figures on Wednesday that added to doubts about when the Bank of England will raise interest rates again and pushed sterling to its lowest level against the dollar this year.
Consumer price inflation cooled to 2.4 percent last month, its weakest increase since March 2017, and down from 2.5 percent this March.
The figure was below economists’ average expectation in a Reuters poll for it to hold steady at 2.5 percent and represented the second surprise fall in a row after a drop in March’s figures. “It’s a conundrum for the Bank of England which has struggled to read the direction of price changes recently,” Ed Monk, associate director for personal investing at fund manager Fidelity International, said.
“With inflation trending lower, it only makes it harder for the Bank of England to raise rates.” Investors were now pricing in a one-in-three chance of a BoE rate hike in August — the next time it updates its forecasts on the economy — down from 50/50 before Tuesday’s data.
High inflation, caused by the pound’s drop after the 2016 Brexit vote, squeezed British consumers through last year, and although it has receded from its December peak of 3.1 percent, the BoE is keeping a close eye on price pressures.
PIPELINE PRESSURE
Wednesday’s data pointed to some signs of inflation pressure still in the pipeline. Prices of goods leaving British factories increased at a faster rate than expected last month. And while consumer price inflation cooled again, the timing of the Easter holidays and their impact on air fare prices was a big contributor.
On Tuesday Bank of England Governor Mark Carney cited a new sugar tax on soft drinks, as well as higher utility bills and petrol prices, as reasons why inflation “probably tips up a bit” in the coming months before resuming a decline. The ONS said soft drink prices increased sharply over the last couple of months but the overall impact on inflation was minimal.
The latest data on prices in British factories, which eventually feed through onto the high street, were stronger than anticipated. Manufacturers increased the prices they charged by 2.7 percent year-on-year, matching March’s increase. Economists had expected a fall to 2.3 percent. Among manufacturers, the cost of raw materials — many of them imported such as oil — was 5.3 percent higher than in April 2017, up sharply from an increase of 4.4 percent in March and suggesting a long run of weakening price growth has ended.
A surprise drop in consumer price inflation in March, along weak economic growth figures for early 2018, had called into question whether the BoE would raise interest rates more than once before the end of the year.
Earlier this month it refrained from an interest rate hike that had at one point been widely expected. The BoE’s latest forecasts show inflation dropping to 2.1 percent in a year’s time, and returning to its 2.0 percent target a year later — but only if interest rates rise by 25 basis points about three times over three years.
The latest Reuters poll of economists suggests the BoE is most likely to raise interest rates at its August meeting.